Bond Discount, Entries for Bonds Payable Transactions

On July 1, Year 1, Danzer Industries Inc. issued $6,600,000 of 5-year, 9% bonds at a market (effective) interest rate of 10%, receiving cash of $6,345,160. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.

Bond Discount, Entries for Bonds Payable Transactions on July 1 Year 1 Danzer Industries Inc. issued $6,600,000 of 5 year, 9% bonds at a market effective interest rate of 10% receiving cash of s6,345, 150 Interest on the bonds is payable semiannually on December 31 and June 30 The fiscal year o the company is the calendar year Required: 1. Jounalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1. If an amount box does not require an entry, leave it blank. calendar 2. Jounalize the entries to record the following: If an amount box does not require an entry, leave it blank. a. The first sem annual interest payment on December 31, Year and the amortization of the bond discount using the straight-line method Round your answer to the nearest dollar b. The interest payment an June 30, Year 2, and the amortization of the bond discount, using the straight-line method. (Round your answer to the nearest dollar) 3. Determine the total interest expense for Year 1. Round to the nearest dollar 1. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest? ss than the 5. Compute the price of $,345,160 received for the bonds by using Exhibit 5 and Exhibit 7. (Round you PV values to 5 decimal places and the final answers to the nearest dollar.) Your total may vary slightly from the price given due to rounding differences. Present value of the face amount